Ontario Automotive Recyclers Associationhttps://oara.com
Thu, 21 Mar 2019 15:47:46 +0000 en-CA
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1 https://wordpress.org/?v=5.1.1Greater awareness: creating new partnerships can lead to very positive resultshttps://oara.com/2019/greater-awareness-creating-new-partnerships-can-lead-to-very-positive-results/
Sat, 09 Mar 2019 17:19:05 +0000https://autorecyclers.ca/?p=3362This past summer, Krown Rust Control teamed up with the University of Windsor to develop a Corrosion Index. Basically, it’s a consumer-oriented metric designed to both measure and communicate the amount of rust that accumulates on a vehicle... Read full post »

]]>This past summer, Krown Rust Control teamed up with the University of Windsor to develop a Corrosion Index. Basically, it’s a consumer-oriented metric designed to both measure and communicate the amount of rust that accumulates on a vehicle after a certain period of time whether it’s treated with a rust control product or left untreated.

Our association got involved with the project and we had some of our members supply parts for the study.

Additional benefits

Beyond the consumer message that by protecting your vehicle using a rust control product will keep it on the road longer, there are additional benefits in that by keeping the vehicle in circulation longer, it reduces the impact on the environment since it isn’t being recycled prematurely.

For recyclers, there are also additional benefits in that when the vehicle is finally retired, the parts salvaged from it are in better condition, which means they can be more effectively used on other vehicles, promoting better vehicle safety and functionality, while recyclers can also get a premium for them.

Teaming up with Krown and the University of Windsor is part of a larger strategic initiative to spread awareness about the role that automotive recyclers play in the circular economy. Often, there isn’t a great deal of understanding about what we actually do but when you explain it through things like the connection between rust control and recycling it can really change perspectives.

Long-term outlook

Recyclers are in a fairly unique situation because they need to learn about a vehicle once it’s manufactured and driven off the lot, even though they won’t actually get their hands on it until up to 10-12 years down the road. When it comes to any issue that is happening in the automotive sector, we want to make sure we pay attention to it and the impact it is likely to have on our segment of the industry. That means understanding the materials used, how they are put together and taken apart, and how different parts wear and last.

The Corrosion Index is one of a number of initiatives we’ve been working on with Krown— another includes consumer education videos that play in Krown centres. Customers waiting for their vehicle to be rustproofed can see what’s involved with the recycling process from handling scrap tires to what happens when a vehicle is crushed. It’s general interest and somewhat anecdotal but again, it also serves to showcase what certified recyclers actually do.

Greater understanding

About 7-8 years ago, when our industry went through the certification process and we worked with the federal government on programs such as Retire your Ride, there were those that looked at us and said why would we put extra regulations on ourselves when there were other businesses down the street that didn’t have to.

Over the longer term however, creating these certification programs and spreading awareness has helped differentiate us and it has led to all sorts of positive developments such as specific vehicle programs.

Recyclers have a key role to play within an automotive repair economy that also includes insurers and collision repairers. Ideally, we take the total loss vehicles from insurers, part them out and provide quality parts to repairers at the right time. When we’re able to do that more effectively it makes the relationship between the insurer and repairer work better and creates an entire process that’s just so much more seamless and circular.

]]>International: Finding common groundhttps://oara.com/2018/international-finding-common-ground/
Mon, 24 Sep 2018 17:19:50 +0000https://autorecyclers.ca/?p=3354I was recently interviewed by a consultant to the French government doing a formal international poll of how other countries get end-of-life vehicles into the legitimate industry’s hands as opposed to those of the unlicensed underground economy. It... Read full post »

]]>I was recently interviewed by a consultant to the French government doing a formal international poll of how other countries get end-of-life vehicles into the legitimate industry’s hands as opposed to those of the unlicensed underground economy.

It was an interesting discussion to see where Canada is in making sure that the majority of vehicles coming off the road are processed by the right entity.

In France, they’ve used Authorized Treatment Facilities (ATFs) for the last decade or so. These are very regulated businesses and they’ve been working with them to develop the right oversight and standards, but they’re still finding that the underground economy flourishes because the person who owns the car at end-of-life is making an economic decision – a legal ATF can pay a certain amount for a vehicle, but someone who cuts corners may be able to pay more for the vehicle.

In Canada, we’re a series of related provinces that essentially makes their own environmental rules. You can’t say that Canada as an entity has a specific way of dealing with auto recyclers, but we’re our way to doing that. We’re at the point where we’re helping governments to identify what auto recycling is, who an auto recycler is, and what they should be doing.

Where to start

Each province is at a different step along that development scale, but it basically reaffirmed that our process of identifying an auto recycler, putting standards in place that a good business can and should meet and beginning to measure them against that target is the first step that we have to take in order to get more vehicles processed at end-of-life properly.

International conversations like these create an opportunity to reach out to our own government and let them know we’re talking globally about how we’re positioned in Canada. We think we’re on the right path and we need to keep going down that path with more provinces. Hopefully, we can reach a point where there’s enough authorized treatment facilities and licensed recyclers that we can communicate to consumers to take their car to a licensed auto recycler because there’s one in their neighbourhood.

The Canadian Auto Recyclers Environmental Code (CAREC) is the voluntary code of practice that the Association put in place about seven years ago to help bring in standards, and France was blown away that we had something voluntary happening ahead of the regulations, while they had to put regulations in place first.

International connections

And that’s where we are in Ontario, trying to put it in place a sound regulatory model and make it work, and then working with other provinces to show them the benefits of having a regulated industry and knowing where these cars go.

Through events like the International Round Table that we hosted, we have been able to develop international connections in the industry. These help show government that what we are proposing in Canada is not something revolutionary but something the rest of the world is already working on.

So, it was a really interesting conversation to say Yes, you’re doing the right thing – keep doing it, but also keep reaching out to the rest of the world to find out where they are and what pitfalls they’re coming across. There’s a lot we have to learn on our own along the way, but we can share that knowledge with each other and get faster down the official lifecycle of how cars are properly treated.

]]>How It Works: Vehicle recyclinghttps://oara.com/2018/how-it-works-vehicle-recycling-2/
Wed, 23 May 2018 14:17:31 +0000https://autorecyclers.ca/?p=3309Even when a vehicle reaches the end of its life, there’s still value in it. While it’s common for people to say it “goes to the scrapyard,” it actually heads to recycling. Between metal and reusable items, about... Read full post »

]]>Even when a vehicle reaches the end of its life, there’s still value in it. While it’s common for people to say it “goes to the scrapyard,” it actually heads to recycling.

Between metal and reusable items, about 83 per cent of a vehicle is recycled, according to Steve Fletcher, executive director of the Ontario Automotive Recyclers Association (OARA).

“As the manufacturers have light-weighted their vehicles, there are more plastics, but there’s a lot more aluminum,” he says. “There are a lot more electronics and therefore more rare-earth metals, and catalytic converters are worth more. You can extract $500 to $600 in metal out of a car, but you have to understand the effort to get it out.”

Once a vehicle goes to the recycler, the first step is to determine what to keep. Components that are still in good working condition, or any body parts or panels that are in good shape, are kept and catalogued for future sale.

All fluids are removed, a process known as “depollution.” Most recyclers keep the gasoline for use in their yard vehicles. Used oil is sold to recyclers, who process it into new oil or, if that isn’t possible, sell it to industries such as asphalt manufacturing to burn in their furnaces. Other fluids, such as antifreeze, washer fluid or transmission oil, are reused by the yard or sent for recycling.

Hazardous materials must be properly managed to avoid environmental damage. These include air conditioning refrigerant, lead wheel weights, and on older vehicles, under-hood lights, which were phased out in 2003 because they contain mercury in their switches. Government-funded programs used to be in place for proper switch collection and disposal, for both in cars coming into the yard and any that might have been in inventory for years, since the lights date back to the 1950s. Fletcher says the program has been discontinued, and recyclers will now have to deal with any remaining switches on their own.

Tires are sent for recycling, where they become new products such as playground surfaces or roofing. There isn’t an established recycling path for high-tech material such as carbon fibre in place right now, but recyclers haven’t yet started to get much of it in scrapped vehicles. Once the vehicle is stripped, it’s flattened in a giant press to make it easier to handle, and from there it goes to a shredder. Unless the seats and interior trim can be reused, they’re usually left inside. Metals are separated out using magnets or compressed air. The remainder, mostly plastic, carpet, glass, and seat fabric, is spread on landfills to reduce odour and pests.

“We think that, over time, they’re going to go back in and mine that landfill because the technology to recover non-ferrous metals has gone up dramatically, as well as the metals’ price,” Fletcher says. “Some of the shredders are already putting in flotation technology and optical identification to get smaller pieces of metal out, and finding that it pays.”

Conventional lead-acid batteries are sold as a core for refurbishment, but hybrid and electric vehicle batteries currently present more of an issue.

“You can’t leave it in the vehicle in a shredder, because it creates all sorts of (problems),” Fletcher says. “They can be reused unless they’re damaged, but we’re getting them in quantities that are beginning to surpass reuse levels.

“We’re the middle people dealing with that, and right now there’s a big information and processing gap between what has to happen and what we know about how to do it. There are probably six or seven (hybrid) battery recyclers in North America. GM’s the one company that’s stepped forward and said if you get a battery you can’t use, they handle the logistics of getting it to British Columbia for final recovery. We need more interaction with the manufacturers.”

Recalls can also present issues for recyclers, who need to know if the parts they’re taking off vehicles for reuse are affected by any safety issues.

How It Works: Vehicle recall notices
“There’s some uncertainty in the value of our inventory, because we don’t have the data as to which VINs (vehicle information numbers) are under recall. You can get the information but it’s one VIN at a time, and when there are 5,000 parts in your inventory, it’s tough.”

Most recyclers transfer the vehicle ownerships when they get the cars, and so they receive any new recall notices, “but you have the long path of going into your inventory and deleting the parts, and it’s a big administrative burden for us,” Fletcher says. “If it’s a part (that’s affected), they’ll throw it into the scrap metal pile, or throw it in the vehicle and let the shredding process sort out the metal.”

Even decades ago, cars never went straight to landfill, Fletcher says, because of the value in their materials.

“A car is an asset, and it has to be managed that way,” he says, adding that the biggest issue today is in understanding the new materials and technologies as they show up in vehicles, so that recyclers are able to deal with them at the end of the vehicle’s life.

]]>How It Works: Vehicle recyclinghttps://oara.com/2018/how-it-works-vehicle-recycling/
Wed, 23 May 2018 14:17:31 +0000http://autorecyclers.ca/?p=3309Even when a vehicle reaches the end of its life, there’s still value in it. While it’s common for people to say it “goes to the scrapyard,” it actually heads to recycling. Between metal and reusable items, about... Read full post »

]]>Even when a vehicle reaches the end of its life, there’s still value in it. While it’s common for people to say it “goes to the scrapyard,” it actually heads to recycling.

Between metal and reusable items, about 83 per cent of a vehicle is recycled, according to Steve Fletcher, executive director of the Ontario Automotive Recyclers Association (OARA).

“As the manufacturers have light-weighted their vehicles, there are more plastics, but there’s a lot more aluminum,” he says. “There are a lot more electronics and therefore more rare-earth metals, and catalytic converters are worth more. You can extract $500 to $600 in metal out of a car, but you have to understand the effort to get it out.”

Once a vehicle goes to the recycler, the first step is to determine what to keep. Components that are still in good working condition, or any body parts or panels that are in good shape, are kept and catalogued for future sale.

All fluids are removed, a process known as “depollution.” Most recyclers keep the gasoline for use in their yard vehicles. Used oil is sold to recyclers, who process it into new oil or, if that isn’t possible, sell it to industries such as asphalt manufacturing to burn in their furnaces. Other fluids, such as antifreeze, washer fluid or transmission oil, are reused by the yard or sent for recycling.

Hazardous materials must be properly managed to avoid environmental damage. These include air conditioning refrigerant, lead wheel weights, and on older vehicles, under-hood lights, which were phased out in 2003 because they contain mercury in their switches. Government-funded programs used to be in place for proper switch collection and disposal, for both in cars coming into the yard and any that might have been in inventory for years, since the lights date back to the 1950s. Fletcher says the program has been discontinued, and recyclers will now have to deal with any remaining switches on their own.

Tires are sent for recycling, where they become new products such as playground surfaces or roofing. There isn’t an established recycling path for high-tech material such as carbon fibre in place right now, but recyclers haven’t yet started to get much of it in scrapped vehicles. Once the vehicle is stripped, it’s flattened in a giant press to make it easier to handle, and from there it goes to a shredder. Unless the seats and interior trim can be reused, they’re usually left inside. Metals are separated out using magnets or compressed air. The remainder, mostly plastic, carpet, glass, and seat fabric, is spread on landfills to reduce odour and pests.

“We think that, over time, they’re going to go back in and mine that landfill because the technology to recover non-ferrous metals has gone up dramatically, as well as the metals’ price,” Fletcher says. “Some of the shredders are already putting in flotation technology and optical identification to get smaller pieces of metal out, and finding that it pays.”

Conventional lead-acid batteries are sold as a core for refurbishment, but hybrid and electric vehicle batteries currently present more of an issue.

“You can’t leave it in the vehicle in a shredder, because it creates all sorts of (problems),” Fletcher says. “They can be reused unless they’re damaged, but we’re getting them in quantities that are beginning to surpass reuse levels.

“We’re the middle people dealing with that, and right now there’s a big information and processing gap between what has to happen and what we know about how to do it. There are probably six or seven (hybrid) battery recyclers in North America. GM’s the one company that’s stepped forward and said if you get a battery you can’t use, they handle the logistics of getting it to British Columbia for final recovery. We need more interaction with the manufacturers.”

Recalls can also present issues for recyclers, who need to know if the parts they’re taking off vehicles for reuse are affected by any safety issues.

How It Works: Vehicle recall notices
“There’s some uncertainty in the value of our inventory, because we don’t have the data as to which VINs (vehicle information numbers) are under recall. You can get the information but it’s one VIN at a time, and when there are 5,000 parts in your inventory, it’s tough.”

Most recyclers transfer the vehicle ownerships when they get the cars, and so they receive any new recall notices, “but you have the long path of going into your inventory and deleting the parts, and it’s a big administrative burden for us,” Fletcher says. “If it’s a part (that’s affected), they’ll throw it into the scrap metal pile, or throw it in the vehicle and let the shredding process sort out the metal.”

Even decades ago, cars never went straight to landfill, Fletcher says, because of the value in their materials.

“A car is an asset, and it has to be managed that way,” he says, adding that the biggest issue today is in understanding the new materials and technologies as they show up in vehicles, so that recyclers are able to deal with them at the end of the vehicle’s life.

]]>Demand for recycled parts is evolvinghttps://oara.com/2018/demand-for-recycled-parts-is-evolving-2/
Mon, 16 Apr 2018 17:05:29 +0000https://autorecyclers.ca/?p=3301As vehicles become more complex, the value and demand for parts salvaged from them is changing. As vehicles and repair techniques become more complex, manufacturers are trending toward OEM certification to ensure proper techniques, data and tools are... Read full post »

]]>As vehicles become more complex, the value and demand for parts salvaged from them is changing.

As vehicles and repair techniques become more complex, manufacturers are trending toward OEM certification to ensure proper techniques, data and tools are utilized.

For auto recyclers, the trend is double-sided. “It’s a real challenge because it’s almost impossible to find an OEM manufacturer who will talk kindly about recycled or salvaged parts,” says Steve Fletcher, Managing Director, Automotive Recyclers of Canada.

While this is cause for concern, there is room for opportunity in the ever-evolving parts that are coming off today’s cars.

“The amount of electronic components that are incorporated into cars these days is, on one hand, a huge opportunity for us, because those modules are something with not a lot of moving parts, they can be plucked off, and they are of very high value,” says Fletcher.

But often, those parts are tuned into the car electronically, and recyclers don’t have access to the data. Fletcher says he doesn’t think they’re selling as much as they could because these difficulties require the shop to understand what they can order from a recycler versus what they have to order from the dealership.

Fewer repairs, but fewer shops
Andrew MacDonald, the Owner of Maritime Auto Parts in Truro, Nova Scotia, says he thinks the market-wide demand for recycled parts is generally increasing, but there are also businesses shuttering their doors.

“It sounds very cliché to say this, but it’s not the same as it used to be,” he says. “We have to pay a lot more attention to what’s actually in demand and cycle our cars a little bit differently. If you’re not actively buying and actively cycling your inventory, then you’re not going to be able to be as profitable as you used to be.”

Which parts are most in demand is changing with technology. As cars get more complicated, parts become more valuable–a positive for the recyclers selling those parts, but coinciding with more cars becoming economic write-offs that are too expensive to reprogram and repair. With fewer cars to fix, fewer parts are sold.

“Some of these components are starting to change—but sometimes that makes the car economically irreparable on the collision side, so it’s kind of a Catch-22,” he says. “They don’t fix the car, and we don’t sell the parts. There’s a balance.”

“We have to pay a lot more attention to whats in demand and cycle our cars a little bit differently.” Andrew MacDonald, Maritime Auto Parts and Corey Earl

Keeping up
Corey Earl, Operations Manager at Hotch’s Auto Parts near Belleville, Ont., stresses how important it is for recyclers to be aware of these technological advances and understand how they work. “We’ve gotten to the point now where a lot of vehicles basically have a 360-degree radar system, almost like an airplane, on board,” he says.

For this radar system to work, expensive sensors need to be situated near the external shell of the vehicle—making them susceptible to even the lightest parking lot damage. Understanding the value of these components is key to salvaging and selling more of them.

“Technological advances have always been very interesting to me, and how it relates to our industry and circles around is always something to keep an eye on,” says Earl. “It’s very easy to get left behind in old school-type thinking, which can hurt your bottom line and the industry as a whole if whole swaths of recyclers don’t realize the resources out there—it can be either a very lucrative time, or a very hard time for recyclers depending on how you look at it.”

]]>Demand for recycled parts is evolvinghttps://oara.com/2018/demand-for-recycled-parts-is-evolving/
Mon, 16 Apr 2018 17:05:29 +0000http://autorecyclers.ca/?p=3301As vehicles become more complex, the value and demand for parts salvaged from them is changing. As vehicles and repair techniques become more complex, manufacturers are trending toward OEM certification to ensure proper techniques, data and tools are... Read full post »

]]>As vehicles become more complex, the value and demand for parts salvaged from them is changing.

As vehicles and repair techniques become more complex, manufacturers are trending toward OEM certification to ensure proper techniques, data and tools are utilized.

For auto recyclers, the trend is double-sided. “It’s a real challenge because it’s almost impossible to find an OEM manufacturer who will talk kindly about recycled or salvaged parts,” says Steve Fletcher, Managing Director, Automotive Recyclers of Canada.

While this is cause for concern, there is room for opportunity in the ever-evolving parts that are coming off today’s cars.

“The amount of electronic components that are incorporated into cars these days is, on one hand, a huge opportunity for us, because those modules are something with not a lot of moving parts, they can be plucked off, and they are of very high value,” says Fletcher.

But often, those parts are tuned into the car electronically, and recyclers don’t have access to the data. Fletcher says he doesn’t think they’re selling as much as they could because these difficulties require the shop to understand what they can order from a recycler versus what they have to order from the dealership.

Fewer repairs, but fewer shops
Andrew MacDonald, the Owner of Maritime Auto Parts in Truro, Nova Scotia, says he thinks the market-wide demand for recycled parts is generally increasing, but there are also businesses shuttering their doors.

“It sounds very cliché to say this, but it’s not the same as it used to be,” he says. “We have to pay a lot more attention to what’s actually in demand and cycle our cars a little bit differently. If you’re not actively buying and actively cycling your inventory, then you’re not going to be able to be as profitable as you used to be.”

Which parts are most in demand is changing with technology. As cars get more complicated, parts become more valuable–a positive for the recyclers selling those parts, but coinciding with more cars becoming economic write-offs that are too expensive to reprogram and repair. With fewer cars to fix, fewer parts are sold.

“Some of these components are starting to change—but sometimes that makes the car economically irreparable on the collision side, so it’s kind of a Catch-22,” he says. “They don’t fix the car, and we don’t sell the parts. There’s a balance.”

“We have to pay a lot more attention to whats in demand and cycle our cars a little bit differently.” Andrew MacDonald, Maritime Auto Parts and Corey Earl

Keeping up
Corey Earl, Operations Manager at Hotch’s Auto Parts near Belleville, Ont., stresses how important it is for recyclers to be aware of these technological advances and understand how they work. “We’ve gotten to the point now where a lot of vehicles basically have a 360-degree radar system, almost like an airplane, on board,” he says.

For this radar system to work, expensive sensors need to be situated near the external shell of the vehicle—making them susceptible to even the lightest parking lot damage. Understanding the value of these components is key to salvaging and selling more of them.

“Technological advances have always been very interesting to me, and how it relates to our industry and circles around is always something to keep an eye on,” says Earl. “It’s very easy to get left behind in old school-type thinking, which can hurt your bottom line and the industry as a whole if whole swaths of recyclers don’t realize the resources out there—it can be either a very lucrative time, or a very hard time for recyclers depending on how you look at it.”

]]>Hitting the Reset Buttonhttps://oara.com/2018/hitting-the-reset-button-2/
Fri, 02 Feb 2018 12:36:15 +0000https://autorecyclers.ca/?p=3280Driven by trends in technology and repair techniques, parts recyclers are calling for a new focus on industry forces working together. Whether you’re a new technician entering the automotive world, or you know someone who is – perhaps... Read full post »

]]>Driven by trends in technology and repair techniques, parts recyclers are calling for a new focus on industry forces working together.

Whether you’re a new technician entering the automotive world, or you know someone who is – perhaps you’ve just hired one or two – it’s critical to understand one thing: Your education is never finished!

“The best professional automotive recyclers demonstrate essentially the same characteristics as those in automotive repair shops. They subscribe to best practices, including the Gold Seal and Certified Automotive Recycler certifications of the Automotive Recyclers Association (ARA), and work to position themselves in the marketplace as providers of excellent experiences for their customers. They’re also trying to stay ahead of rapid changes in vehicles rolling off the assembly lines.

Some examples of those changes include advanced virtual computers; high-strength steel and plastics; high-tech software that can track the habits of car owners; 24/7 wireless connectivity that’s subordinate to high-profit business models (think Tesla and Google); and OEMs exerting control over the recyclers’ creations.

Bottom lines and business models are changing. Regulations, legislation and the courts are impeding. Yet despite all the changes, professional automotive recyclers continue to seek creative ways to serve customers and maintain market share.

What follows are some of the issues that the industry is working to master. Some of the issues will be years in the making; others are knocking on your door now.

The Parts-Data Issue
Not so much a trend as a critical need, recyclers continue to struggle for access to parts numbers entitled to them by law. “Two years ago, President Obama signed the Fixing America’s Surface Transportation (FAST) Act into law,” notes ARA regional director Scott Robertson, president of Robertson’s Auto Salvage of Wareham, Mass. “It requires OEMs to provide data to recyclers to identify recalled parts. We still don’t have the data. In the future, the OEMs could control all aspects of the vehicles they manufacture. Therefore, they could control how they are repaired and disposed of at end-of-life.”

Viewing this as an antitrust issue, and one that’s not in the best interests of the consumer, ARA is investing time and resources on Capitol Hill in the belief that more partnering is required. Should these efforts be successful, they would benefit all repair, insurance and auto recycling industry partners.

“Until the data is released,” adds Mike Kunkel, of Profit Team Consulting, “the auto recycler must continue to stay efficient to remain profitable.”

The High-Value Parts Issue
Smartphones keep consumers connected, and they want that same level of connectivity in their cars, too. Automakers are responding to these desires at light speed. And as the National Highway Traffic Safety Administration’s (NHTSA) Crash Avoidance and Electronic Controls Research Program contributes to the public’s acceptance of advanced crash-avoidance systems, automakers are digitizing their vehicles at a rapid pace to meet the demand, which means that the number of salvageable auto parts is multiplying – as is the value of those parts.

For example, just one electronic sensor on a new Volvo costs $1,200. Automotive recyclers will seize the opportunity to salvage these high-dollar electronics, which will likely replace current cash-cow parts.

Imagine dismantling and recycling all of those systems? Yet for the progressive and adaptable recycler, the potential for profit will be astounding. And although vehicle safety technology mandates might increase, with the intended result being fewer accidents, auto salvage recyclers must rise to the challenges of increasing the number of parts of higher value that they have in stock.

“Electric and hybrid vehicles will soon dominate the market,” says Norman Wright, president, Stadium Auto Parts in Denver, Colo., a Gold Seal facility that celebrates its 73rd year in business in 2018. “As such, auto recyclers must train their techs to handle dismantling a high volume of these technology-driven vehicles.”

Tanvir Arfi, managing director at Solera Holdings, affirmed that point in a 2016 Automotive Recycling magazine article. “Electronic parts will not be crushed like metal and put into landfills,” he wrote. “The marketplace will expect these parts to be responsibly handled. The automotive recycling industry already carries the green flag of reusability with regard to the carbon footprint. We need to celebrate this green potential.”

The Tech-Tsunami Issue
With technology increasing, consumers are the only factor slowing the pace of technological development enough so that the recycling and repair industries will have time to adapt. A 2016 ReportLinker.com survey reported that a majority of consumers – 63 percent – said they wouldn’t feel safe in a fully automated vehicle, with 36 percent of them citing road safety and 10 percent naming vehicle safety as the reasons.

So although auto recyclers have some time before they need to place “geek wanted” ads, they will need to seek a more technologically skilled workforce in the near future, according to Virginia Whelan, executive director of the ARA’s Education Foundation and ARAUniversity.org, the industry’s online training platform.

“The automotive technology tsunami is a huge disruptive shift that is reshaping automotive recycling workforce training,” she says. “Connected cars, guided by computer and sensor systems, have ushered in an era of ‘everything is programmable’ – an era of thinking about the car in computational, programmable and designable terms when repairing.

“New technologies and system platforms are driving an unprecedented reorganization of how automotive recyclers train for recycling and reuse. Diagnostic scan tools are entering the auto recycling industry for part removal, damage analysis and reprograming for reuse. It is important to note that many vehicle makers require calibration and initialization of advanced safety systems and driver-assist systems following parts replacement. And auto recyclers are training with scan tools to maintain and grow the reuse of these parts.”

Despite fewer accidents, new profit could be found in those recyclable and reprogrammable, high-valued electronics that would be too costly to replace with new components. A new skilled workforce will be needed to remove, reprogram, test and certify parts, just in time for more computer-savvy generations who enter the workforce looking for meaningful employment.

The Internal-Processes Issue
“Trends in the repair industry are impacting the automotive recyclers by pushing them to revisit all aspects of their processes to increase and deliver quality recycled parts for reuse,” Whelan says.

With vehicle connectivity in place, there could be diagnostic opportunities for insurance, repair and recycled auto parts providers to know exactly which parts are needed before a vehicle comes to a shop for the actual repair. Getting parts before the car arrives could decrease cycle time, but auto recyclers continue to look for better transportation, inventory management and internal processes to speed delivery of parts to their repair partners.

“Electronic procurement of quality recycled auto parts will dominate service to the marketplace,” says Wright. “As the repair industry continues to consolidate and have much more influence on which parts are being used in the repair process, so is the automotive recycling industry. It will shift the demographic as large, well-financed, automated and efficient operations, or trading groups, service the marketplace. Relationships and processes developed with selected repairers and insurers may save some direct procurement opportunities for recycled auto parts.”

The Global-Consolidation Issue
All that leads to the fact that even more consolidation will likely take place in the foreseeable future. According to Wright, “Fewer professional automotive recycling facilities will stay in business because of shrinking margins and availability of salvage, a real global issue. More and more recyclers will either sell to consolidators or combine forces in co-op trade groups to maintain sufficient inventory to compete and provide the service and availability customers demand.”

Furthermore, Wright points out that, with autonomous cars, the number of new cars sold in metropolitan areas will likely shrink due to ride- and car-sharing operations, which will result in fewer cars on the road.

“Ultimately, we need to show what is available in our trading network and how all parties can best present that data,” Kunkle agrees. “The larger the inventory an auto recycler has will help sell parts, but only when the data is executed properly.”

Yet places where end-of-life vehicles can be dismantled must be found. For this critical function, the ARA is working to avoid solutions being dictated at federal or state levels of government. No matter how consolidated the industry becomes or how much change takes place, the ARA believes these factors shouldn’t be allowed to hinder those facilities dedicated to selling quality recycled parts.

And because those issues are of global concern, the ARA has added new international chapters in revitalized countries that are looking for expertise as they grapple to care for end-of-life vehicles.

The Shared-Interests Issue
As the ARA deals with all of that change, it continues to believe that the stage is set for increased collaboration across industry lines to secure the marketplace for shared interests. “A partnership between the repair and automotive recycling industry, along with the insurance industry, is imperative for each one to thrive in the future and provide safe repairs to the consumer at affordable costs,” says Robertson.

According to ARA CEO Michael E. Wilson, the organization is calling on all stakeholders involved in the auto repair marketplace to recognize the value, safety and other benefits that each repair part option – recycled, new, aftermarket or remanufactured – can provide the consumer.

“ARA’s underlying desire is for more professional auto repair representatives to fix repairable vehicles owned by consumers within the insurance pipeline structure,” Wilson says. “Repair procedures that advance only the highest-priced parts option ensure more vehicles owned by consumers ultimately will be declared total losses by insurance companies. In this situation, all stakeholders lose. Consumers will lose their vehicles; insurers will book increased claims costs; and repairers will see a reduction in the volume of repairable vehicles in their professional repair facilities.”

However, current trends will ultimately provide new opportunities for the industry to pursue support for the technology-driven automobile repair process of the future.

]]>Hitting the Reset Buttonhttps://oara.com/2018/hitting-the-reset-button/
Fri, 02 Feb 2018 12:36:15 +0000http://autorecyclers.ca/?p=3280Driven by trends in technology and repair techniques, parts recyclers are calling for a new focus on industry forces working together. Whether you’re a new technician entering the automotive world, or you know someone who is – perhaps... Read full post »

]]>Driven by trends in technology and repair techniques, parts recyclers are calling for a new focus on industry forces working together.

Whether you’re a new technician entering the automotive world, or you know someone who is – perhaps you’ve just hired one or two – it’s critical to understand one thing: Your education is never finished!

“The best professional automotive recyclers demonstrate essentially the same characteristics as those in automotive repair shops. They subscribe to best practices, including the Gold Seal and Certified Automotive Recycler certifications of the Automotive Recyclers Association (ARA), and work to position themselves in the marketplace as providers of excellent experiences for their customers. They’re also trying to stay ahead of rapid changes in vehicles rolling off the assembly lines.

Some examples of those changes include advanced virtual computers; high-strength steel and plastics; high-tech software that can track the habits of car owners; 24/7 wireless connectivity that’s subordinate to high-profit business models (think Tesla and Google); and OEMs exerting control over the recyclers’ creations.

Bottom lines and business models are changing. Regulations, legislation and the courts are impeding. Yet despite all the changes, professional automotive recyclers continue to seek creative ways to serve customers and maintain market share.

What follows are some of the issues that the industry is working to master. Some of the issues will be years in the making; others are knocking on your door now.

The Parts-Data Issue
Not so much a trend as a critical need, recyclers continue to struggle for access to parts numbers entitled to them by law. “Two years ago, President Obama signed the Fixing America’s Surface Transportation (FAST) Act into law,” notes ARA regional director Scott Robertson, president of Robertson’s Auto Salvage of Wareham, Mass. “It requires OEMs to provide data to recyclers to identify recalled parts. We still don’t have the data. In the future, the OEMs could control all aspects of the vehicles they manufacture. Therefore, they could control how they are repaired and disposed of at end-of-life.”

Viewing this as an antitrust issue, and one that’s not in the best interests of the consumer, ARA is investing time and resources on Capitol Hill in the belief that more partnering is required. Should these efforts be successful, they would benefit all repair, insurance and auto recycling industry partners.

“Until the data is released,” adds Mike Kunkel, of Profit Team Consulting, “the auto recycler must continue to stay efficient to remain profitable.”

The High-Value Parts Issue
Smartphones keep consumers connected, and they want that same level of connectivity in their cars, too. Automakers are responding to these desires at light speed. And as the National Highway Traffic Safety Administration’s (NHTSA) Crash Avoidance and Electronic Controls Research Program contributes to the public’s acceptance of advanced crash-avoidance systems, automakers are digitizing their vehicles at a rapid pace to meet the demand, which means that the number of salvageable auto parts is multiplying – as is the value of those parts.

For example, just one electronic sensor on a new Volvo costs $1,200. Automotive recyclers will seize the opportunity to salvage these high-dollar electronics, which will likely replace current cash-cow parts.

Imagine dismantling and recycling all of those systems? Yet for the progressive and adaptable recycler, the potential for profit will be astounding. And although vehicle safety technology mandates might increase, with the intended result being fewer accidents, auto salvage recyclers must rise to the challenges of increasing the number of parts of higher value that they have in stock.

“Electric and hybrid vehicles will soon dominate the market,” says Norman Wright, president, Stadium Auto Parts in Denver, Colo., a Gold Seal facility that celebrates its 73rd year in business in 2018. “As such, auto recyclers must train their techs to handle dismantling a high volume of these technology-driven vehicles.”

Tanvir Arfi, managing director at Solera Holdings, affirmed that point in a 2016 Automotive Recycling magazine article. “Electronic parts will not be crushed like metal and put into landfills,” he wrote. “The marketplace will expect these parts to be responsibly handled. The automotive recycling industry already carries the green flag of reusability with regard to the carbon footprint. We need to celebrate this green potential.”

The Tech-Tsunami Issue
With technology increasing, consumers are the only factor slowing the pace of technological development enough so that the recycling and repair industries will have time to adapt. A 2016 ReportLinker.com survey reported that a majority of consumers – 63 percent – said they wouldn’t feel safe in a fully automated vehicle, with 36 percent of them citing road safety and 10 percent naming vehicle safety as the reasons.

So although auto recyclers have some time before they need to place “geek wanted” ads, they will need to seek a more technologically skilled workforce in the near future, according to Virginia Whelan, executive director of the ARA’s Education Foundation and ARAUniversity.org, the industry’s online training platform.

“The automotive technology tsunami is a huge disruptive shift that is reshaping automotive recycling workforce training,” she says. “Connected cars, guided by computer and sensor systems, have ushered in an era of ‘everything is programmable’ – an era of thinking about the car in computational, programmable and designable terms when repairing.

“New technologies and system platforms are driving an unprecedented reorganization of how automotive recyclers train for recycling and reuse. Diagnostic scan tools are entering the auto recycling industry for part removal, damage analysis and reprograming for reuse. It is important to note that many vehicle makers require calibration and initialization of advanced safety systems and driver-assist systems following parts replacement. And auto recyclers are training with scan tools to maintain and grow the reuse of these parts.”

Despite fewer accidents, new profit could be found in those recyclable and reprogrammable, high-valued electronics that would be too costly to replace with new components. A new skilled workforce will be needed to remove, reprogram, test and certify parts, just in time for more computer-savvy generations who enter the workforce looking for meaningful employment.

The Internal-Processes Issue
“Trends in the repair industry are impacting the automotive recyclers by pushing them to revisit all aspects of their processes to increase and deliver quality recycled parts for reuse,” Whelan says.

With vehicle connectivity in place, there could be diagnostic opportunities for insurance, repair and recycled auto parts providers to know exactly which parts are needed before a vehicle comes to a shop for the actual repair. Getting parts before the car arrives could decrease cycle time, but auto recyclers continue to look for better transportation, inventory management and internal processes to speed delivery of parts to their repair partners.

“Electronic procurement of quality recycled auto parts will dominate service to the marketplace,” says Wright. “As the repair industry continues to consolidate and have much more influence on which parts are being used in the repair process, so is the automotive recycling industry. It will shift the demographic as large, well-financed, automated and efficient operations, or trading groups, service the marketplace. Relationships and processes developed with selected repairers and insurers may save some direct procurement opportunities for recycled auto parts.”

The Global-Consolidation Issue
All that leads to the fact that even more consolidation will likely take place in the foreseeable future. According to Wright, “Fewer professional automotive recycling facilities will stay in business because of shrinking margins and availability of salvage, a real global issue. More and more recyclers will either sell to consolidators or combine forces in co-op trade groups to maintain sufficient inventory to compete and provide the service and availability customers demand.”

Furthermore, Wright points out that, with autonomous cars, the number of new cars sold in metropolitan areas will likely shrink due to ride- and car-sharing operations, which will result in fewer cars on the road.

“Ultimately, we need to show what is available in our trading network and how all parties can best present that data,” Kunkle agrees. “The larger the inventory an auto recycler has will help sell parts, but only when the data is executed properly.”

Yet places where end-of-life vehicles can be dismantled must be found. For this critical function, the ARA is working to avoid solutions being dictated at federal or state levels of government. No matter how consolidated the industry becomes or how much change takes place, the ARA believes these factors shouldn’t be allowed to hinder those facilities dedicated to selling quality recycled parts.

And because those issues are of global concern, the ARA has added new international chapters in revitalized countries that are looking for expertise as they grapple to care for end-of-life vehicles.

The Shared-Interests Issue
As the ARA deals with all of that change, it continues to believe that the stage is set for increased collaboration across industry lines to secure the marketplace for shared interests. “A partnership between the repair and automotive recycling industry, along with the insurance industry, is imperative for each one to thrive in the future and provide safe repairs to the consumer at affordable costs,” says Robertson.

According to ARA CEO Michael E. Wilson, the organization is calling on all stakeholders involved in the auto repair marketplace to recognize the value, safety and other benefits that each repair part option – recycled, new, aftermarket or remanufactured – can provide the consumer.

“ARA’s underlying desire is for more professional auto repair representatives to fix repairable vehicles owned by consumers within the insurance pipeline structure,” Wilson says. “Repair procedures that advance only the highest-priced parts option ensure more vehicles owned by consumers ultimately will be declared total losses by insurance companies. In this situation, all stakeholders lose. Consumers will lose their vehicles; insurers will book increased claims costs; and repairers will see a reduction in the volume of repairable vehicles in their professional repair facilities.”

However, current trends will ultimately provide new opportunities for the industry to pursue support for the technology-driven automobile repair process of the future.

]]>Parts Reuse Essentialhttps://oara.com/2018/parts-reuse-essential-2/
Mon, 01 Jan 2018 15:02:25 +0000https://autorecyclers.ca/?p=3277OEMs want an off-ramp on the Circular Economy For the longest time, auto recyclers have coexisted with manufacturers. But now, we are facing challenges with OEMs and their hot and cold views of our industry. Auto recyclers are... Read full post »

For the longest time, auto recyclers have coexisted with manufacturers. But now, we are facing challenges with OEMs and their hot and cold views of our industry.

Auto recyclers are an integral part of the circular economy and end-of-life vehicle management. OEMs understand what recyclers do: we take end-of-life vehicles and break them down for materials and parts. We then sell the materials and try to sell the parts, but that’s becoming more difficult because OEMs are ramping up marketing efforts that portray recycled parts as being inferior.

Previously, these efforts were directed at the offshore aftermarket, which can include counterfeit parts. From a safety standpoint, recyclers agree – OEM parts are always going to have a better fit for the vehicle they’re engineered for.

But now that message has been broadened to emphasize anything that isn’t brand new is a problem that’s just waiting to happen – and these scare tactics are having an impact on the industry.

In reality, recycled parts are OEM parts, and we’re taking them off the vehicles they were built for. It could be six-month-old part with the same fit, function and safety parameters, but for reasons of economics and maintaining their market share, OEMs would rather refer to recyclers as junk yards – as in, you wouldn’t put a piece of junk on your car, even though it’s their own part.

We’re also seeing a lot more OEM-certified shops and OEM-certified repair procedures. Ultimately, those repair procedures say you must buy new and some of the certification programs say you can only buy a part from the dealer.

The technology of cars is evolving, and OEMs are almost shooting themselves in the foot with the level of complexity – where’s the repair industry going to go?

When recycled parts don’t seem like an option, you can total a car pretty quickly. For example, bumper covers used to cost around $400 and you could get them aftermarket for half that. Now, some bumper covers are $4000 because of sensors, cameras and computer components. It doesn’t take much of a fender bender to write the whole thing off and then everyone loses, except for the manufacturer, because they’ll be selling a new car.

So, repairers are starting to get nervous. While they’re getting better information from the manufacturers and it’s easier to order parts, they’re also seeing record levels of write offs, total losses and vehicles not being repaired because it’s getting so expensive.

On the one hand, OEMs wrap themselves around the environmental benefits of the circular economy and how they build these cars so they’re good for the environment at end-of-life. But to them, end-of-life means press it and don’t use the parts, just have somebody do the dirty depollution work and recover those materials. But the circular economy is not just about recycling – reusing and repurposing are essential.

Supporting the circular economy and pushing the idea that recycled parts are inferior are two ideas that don’t match up, and this is something that’s not going to get simpler.

It’s a pretty challenging spot that we’re in, and the repair and insurance industries also see it as a problem. We need to be talking about the issue as an overall sector and not just what benefits one sector over the others.

]]>Parts Reuse Essentialhttps://oara.com/2018/parts-reuse-essential/
Mon, 01 Jan 2018 15:02:25 +0000http://autorecyclers.ca/?p=3277OEMs want an off-ramp on the Circular Economy For the longest time, auto recyclers have coexisted with manufacturers. But now, we are facing challenges with OEMs and their hot and cold views of our industry. Auto recyclers are... Read full post »

For the longest time, auto recyclers have coexisted with manufacturers. But now, we are facing challenges with OEMs and their hot and cold views of our industry.

Auto recyclers are an integral part of the circular economy and end-of-life vehicle management. OEMs understand what recyclers do: we take end-of-life vehicles and break them down for materials and parts. We then sell the materials and try to sell the parts, but that’s becoming more difficult because OEMs are ramping up marketing efforts that portray recycled parts as being inferior.

Previously, these efforts were directed at the offshore aftermarket, which can include counterfeit parts. From a safety standpoint, recyclers agree – OEM parts are always going to have a better fit for the vehicle they’re engineered for.

But now that message has been broadened to emphasize anything that isn’t brand new is a problem that’s just waiting to happen – and these scare tactics are having an impact on the industry.

In reality, recycled parts are OEM parts, and we’re taking them off the vehicles they were built for. It could be six-month-old part with the same fit, function and safety parameters, but for reasons of economics and maintaining their market share, OEMs would rather refer to recyclers as junk yards – as in, you wouldn’t put a piece of junk on your car, even though it’s their own part.

We’re also seeing a lot more OEM-certified shops and OEM-certified repair procedures. Ultimately, those repair procedures say you must buy new and some of the certification programs say you can only buy a part from the dealer.

The technology of cars is evolving, and OEMs are almost shooting themselves in the foot with the level of complexity – where’s the repair industry going to go?

When recycled parts don’t seem like an option, you can total a car pretty quickly. For example, bumper covers used to cost around $400 and you could get them aftermarket for half that. Now, some bumper covers are $4000 because of sensors, cameras and computer components. It doesn’t take much of a fender bender to write the whole thing off and then everyone loses, except for the manufacturer, because they’ll be selling a new car.

So, repairers are starting to get nervous. While they’re getting better information from the manufacturers and it’s easier to order parts, they’re also seeing record levels of write offs, total losses and vehicles not being repaired because it’s getting so expensive.

On the one hand, OEMs wrap themselves around the environmental benefits of the circular economy and how they build these cars so they’re good for the environment at end-of-life. But to them, end-of-life means press it and don’t use the parts, just have somebody do the dirty depollution work and recover those materials. But the circular economy is not just about recycling – reusing and repurposing are essential.

Supporting the circular economy and pushing the idea that recycled parts are inferior are two ideas that don’t match up, and this is something that’s not going to get simpler.

It’s a pretty challenging spot that we’re in, and the repair and insurance industries also see it as a problem. We need to be talking about the issue as an overall sector and not just what benefits one sector over the others.